Money Purchase Plan
Contributions to a pension plan on a fixed basis according to a formula, with variable benefits. Contributions can be made under an allocated funding instrument (paid to an insurance company that purchases an individual annuity or a group deferred annuity), or under an unallocated funding instrument. Individual benefits will be determined by the person's age, sex, normal retirement age, and rate schedules in effect at the time the insurance company receives the contributions. These plans are appropriate for an organization that must know its premium outlay in the years ahead.
Popular Insurance Terms
State that increases the probability of a loss. For example, storage of flammable material next to a furnace in one's home increases the hazard with the knowledge of an insured, and is ...
Additional Living Expense Insurance is a type of coverage present on several types of Homeowner’s Insurance that reimburses additional costs caused because of the insured’s ...
Property coverage for a builder of ships until possession passes to the owners. Protects against pre-launch and post-launch perils. Coverage can be purchased on an all risks basis subject ...
Program through which employees purchase individual life insurance and disability income insurance by having the employer reduce their income by the required insurance premium. Since the ...
Practice in which no funds are set aside on a mathematical basis to pay for expected losses. This occurs when a risk manager is not aware of an exposure, when the cost of treating an ...
Frequency of premium payment; for example annually, semiannually, quarterly, or monthly. ...
Measure of the sensitivity of the insurance company's liability for the resultant higher expense rates than charged for in the premium. ...
Temporary insurance contract providing coverage until a permanent policy is issued. In property and casualty insurance, some agents have authority to bind the insurance company to cover ...
Insurance issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan. If the debtor dies prior to repayment of the debt, the policy will pay off the ...
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